June registered a growth in the sale of new homes

There was a revival of the sale of new homes in the month of June 2010

. This rebound came after a record low reading in the month of May. However, the growth remained sluggish. A hike of 23.6% was registered in June leading to 330,000 units after seasonal adjustments of annual rates. The sales in May were at rock bottom level of 267,000. However, a comparative study of sales from the last year same time shows that the overall sales declined by 16.7%.

In spite of this jump of 23.6%, the home sales of June were the second lowest to be registered since 1963, when the Commerce Department first began to trace the home sales. However, the sales surpassed the expectations of the economists, who expected it to be at 310,000 (seasonally adjusted annual rate).

Even though the hike was a kind of positive sign, economists argue that the housing market is still in deep problems and this evident from the low volumes of mortgage applications and low index of homebuilders' sentiments. Well, the most surprising fact is that the mortgage applications remained low even after the rates of mortgages are at the lowest levels ever in the history of America. This is because of the fact that the homebuyers are now pessimistic and no one wants to see their investments getting undervalued over time.

Data became incredibly interesting when it was found that the home sales skyrocketed in March and April and then plunged down by 40% in the month of May. The reason for this was the homebuyers' tax incentive of $8,000, which was provided by the Federal government who signed on agreements for new houses before April 30th. With the end of the incentive, the rush subsided and home sales declined!

The expiration of the tax credit will leave its effects for several months and then the housing market will eventually start recovering but the pace will be that of a snail. The reasons why the housing market will not recover in leaps and bounds is that the economy is facing strict lending practices, increasing delinquency and foreclosures and high unemployment.

Since the foreclosures are increasing, the prospective homebuyers have a bright opportunity to get preoccupied properties at discounted prices as the lenders will try to get rid of their repossessed properties by offering low prices. So, if you want to buy or invest in foreclosures, the best and most up to date foreclosure listings can be found on ForeclosureDataBank.com.

June registered a growth in the sale of new homes

By: rudsontren

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